A Tennessee businessman accused of taking kickbacks involving millions in military contracts has pleaded guilty in federal court in Georgia.
»RELATED: Feds alleging major kickback scheme at Fort Benning, Fort Gordon
David Kennedy, 67, of Nashville pleaded guilty Tuesday to one count of conspiracy to violate the Anti-Kickback Act and to commit wire fraud, the Columbus Ledger-Enquirer reported. Kennedy faces up to five years in prison and a $250,000 fine when sentenced by U.S. District Judge Clay Land. A sentencing date has not been set.
In 2013, Kennedy worked for a company that won a $29 million contract for work at Fort Benning near Columbus, and in 2014 won a separate contract for $7.7 million at Fort Gordon in Augusta. He then directed millions in subcontract work to Southern Atlantic Construction LLC in exchange for thousands in kickbacks.
“Investigators unraveled a complicated kickback scheme concocted by the defendant to enrich himself to the detriment of the American taxpayer,” said U.S. Attorney Charlie Peeler, who thanked the FBI and the U.S. Army Criminal Investigation Command for their investigation.
According to court records, authorities alleged Kennedy got kickbacks from Gary Hamby, owner and managing partner of Southern Atlantic Construction, and other Southern Atlantic employees in the form of cash and cigars, to help Southern Atlantic win subcontract bids.
Hamby pleaded guilty in 2017 to conspiracy to violate the Anti-Kickback Act. His sentencing was postponed in February and has not been rescheduled.
The Fort Benning scheme began in September 2013, when Kennedy’s employer was awarded a contract to renovate the post’s Starship Barracks, authorities said.
According to a federal indictment, Kennedy told Hamby in February 2015 that Southern Atlantic would be awarded a subcontract on the Benning project if Hamby paid Kennedy kickbacks. Southern Atlantic later sent Kennedy an $800 box of cigars and $5,000 in cash, the indictment said.
In May 2015, Southern Atlantic was awarded the subcontract for about $538,000, according to the indictment.
Southern Atlantic, from May 2015 to December that year, received nearly $1.4 million through purchase orders and contract modifications, and some of that money was returned to Kennedy, the indictment said.
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